Autonomous vehicle technology company Aurora Innovation released its third-quarter earnings report on Wednesday after the bell. The company closed the quarter with approximately $1.2 billion in cash and short-term investments, which Aurora says will be enough to launch commercially in mid-2024.
Those statements were made just days after former competitor Argo AI shut down operations and Mobileye went public with the third-most successful IPO of the year. Both moves are a sign that automakers that were once willing to invest billions in developing AV technology for no short-term profit are now turning their attention and resources to short-term profit centers, such as advanced driver assistance systems in passenger-owned vehicles. . So the question becomes, can Aurora hold out?
Chief financial officer Richard Tame did say during the investor call that Aurora needs to raise more money, but the company wouldn’t clarify to londonbusinessblog.com whether that would happen before or after the 2024 launch. (However, in a memo leaked in September, CEO Chris Urmson wrote to Aurora’s board that it was valuable to find a “path to raise $300 million over the next year to add about six months to our runway.” “) Given the current economic situation and Aurora’s cashburn history, the company may be able to make it to 2024 with the money it currently has, but only – and only if it keeps an eye on costs.
During the third quarter, Aurora’s operating loss was $200 million, up from the $128 million reported in the same quarter of last year, but lower than the nearly $1.2 billion in losses from the second quarter of 2022. If the startup was able to maintain a $200 million net loss from the fourth quarter to the first quarter of 2024, it wouldn’t have to raise more money before the commercial launch. But as a pre-income startup working on cutting edge technology, Aurora will incur huge costs in R&D to scale and bring its product to market. In addition, Aurora should somehow avoid being affected by inflation and supply chain constraints. The result? Aurora will have to find efficiencies across the board.
The leaked memo also outlined a range of cost-cutting and money-generating options for Aurora’s board, including a hiring freeze, possible layoffs, discarding assets, going private and even selling themselves to high-profile tech companies. Aurora didn’t mention any of these potential realities during her earnings call, but that doesn’t mean they’re off the table.
The Street responded positively to Aurora’s efforts to appease investors. The company’s shares are up 5.85% after the market close.
Aurora has prioritized commercializing autonomous freight through a series of pilot partnerships with FedEx, Paccar, Schneider, Werner and Xpress. But the company is also working with Toyota to eventually launch a subscription service for the ride-hailing market. Earlier this year, the company unveiled its test fleet of Toyota Siennas custom-built for robotic axi operations. In the third quarter, Aurora recognized approximately $3 million in partnership revenue from Toyota.